Hyderabad: Hit by last year’s demonetisation exercise and the central government’s cashless push, Kochi-based The Muthoot Group, which is primarily into gold loans business, has more or less shelved its plans to roll out a pan-India network of 9,000 white label automated teller machines (ATM).
The group, which also into a range of segments including media, housing finance, announced its plans to foray into white label ATM space in 2013 after the Reserve Bank of India allowed non-banking private entities to establish white label ATMs that could be used by customers of all banks.
The apex bank’s move was part of its financial inclusion initiatives that intended to take banking to remote corners. Muthoot Finance, a group company that handles gold loans, obtained permission from RBI to deploy 9,000 white label ATMs (WLAs) across India and created a division, Muthoot ATM.
The company, which launched its first white label ATM in Kochi in March 2014, wanted to tap its network of over 4,000 branches spread across the country for its ATM roll-out. As per its original plans, it aimed at establishing 9,000 ATMs in three years’ time, with plans to locate 65 per cent of them in semi-urban and rural areas (mainly Tier III to VI cities/towns).
But it managed to establish just 200 ATMs so far, as the demonetisation exercise in November 2016 and the subsequent plans by the central government to push for cashless transactions took toll on the ATM networks, more importantly white label machines. Most of the ATMs went dry during demonetisation period.
“The original plan was to open 9,000 ATMs. Those plans have been changed as government is not keen now. Every company in the white label ATM space stopped (setting up new ATMs). Therefore, we will not make any new investments (into ATMs space),” Babu John Malayil, Deputy General Manager, The Muthoot Group, told The Hans India on Thursday.
Asked whether Muthoot had made any significant investments into the segment, he said: “We were going steadily and slowly on this. We are always careful about how we spend money,” Malayil maintained. He however hastened to add that the company did not stop the business altogether.
“We can still establish ATMs if we find places where they are required and can attract 100 transactions a day. But we are very careful about that,” he explained. The company’s current lot of 200 ATMs are located across the country with its home state Kerala having the lion share.